Starting May 2, AT&T will begin implementing monthly usage limits for its U-Verse and DSL users and charge $10 fees every time a customer exceeds the cap.

According to Broadband Reports, DSL customers will have a 150GB monthly usage limit, while U-Verse subscribers will get 250GB. AT&T will impose the $10 fee for every 50GB over the limit a customer uses.

This is a pretty large cap, but it’s clearly designed to profit from high-bandwidth users. There’s nothing inherently wrong with charging bandwidth hogs for their capacity; plenty of businesses charge on such a consumption model. The issue comes when this directly affects the ability of video-streaming sites like Netflix to carry out their business model, because of the cost-prohibitive nature of the service for individual users. Just three hours of HD video on Netflix would wipe out the entire 150GB monthly limit, for example. And at that point, AT&T comes back to those who want to watch movies on the Web with their own proprietary service. Before long, companies who want to deliver high-quality broadband video to audiences who want it will see their business models shattered and will be forced to close their doors. And only AT&T and its telecom friends will be around. You don’t have to precisely discriminate against competing sites to practice discrimination.

AT&T is likely to get away with tiered pricing; it’s allowed for in the fake net neutrality rules put out by the FCC, as far as I can tell, and the last time they tried this, consumer complaints succeeded only on the grounds of false advertising, that they were promised unlimited usage. Comcast already has usage fees.

Critics denounced the move:

S. Derek Turner, research director at media reform group Free Press, called AT&T’s most recent venture “a poor solution to an unproven problem.” The move will have “a chilling effect on economic growth and innovation online,” Turner said. “When ISPs force their customers to watch the meter, experimentation, innovation and business will suffer.” Turner also said that AT&T’s overage plan is punitive considering it “bears no discernible relation to underlying costs, which are estimated to be mere pennies per gigabyte.”

Rep. Edward Markey (D-Massachusetts) also expressed his worry over the potential repercussions of AT&T’s usage caps. “I am concerned that charging more for increased usage would raise prices for some consumers and potentially lead to lower broadband adoption levels,” Markey told The Hill. “This would undermine our broadband goals as outlined in the National Broadband Plan while undercutting our global competitiveness, and I will be closely monitoring this decision.”

Come back to the Internet in about five years and see how it’s “progressed.” My guess would be, not far.

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to “AT&T Moves to Tiered Pricing for Broadband”

The “toobz” aspect of this and the prohibitive cost of creating alternatives makes this essentially a monopoly service. We know how to do cost of service monopoly rate regulation — e.g. in natural gas delivery lines and electricity transmission and distribution lines. But this is mostly being done in a non-regulated manner, leaving the owner of the monopoly facilities free to price gouge and price discriminate. It’s unconscionable that the Administration and Congress have sat on their hands while this predictable looting scheme was put in place. And even worse that the Justice Department and Federal Trade Commission pretend these are not equivalent to violations of the anti-trust laws.

I will be dropping Netflix for sure. There are three housemates here sharing two land lines and a DSL service, all from AT&T. This evening we will be discussing how to get AT&T out of our lives altogether. Whatever we owe AT&T when they terminate our service for nonpayment will be their loss. Fuck you AT&T.

Monopoly has become the name of the game in the United States. I remember when Industrial Organization (the economics of monopolized industry) was the dullest damned thing on earth. This was in the 1960s. Then some economists, not all of them from Chicago, began to argue that all this anti-trust stuff was a waste of time and enriched lawyers at the expense of all the rest of us. The last big real anti-trust case to my memory was the one against Microsoft for imposing its browser on Windows. This was small fish, given the monopolization of the health insurance (reported and studied by my friend and colleague Uwe Reinhardt, who didn’t get bored in Industrial Organization), the pharmaceutical industry, communications, and of course, banking. The huge increase in income inequality is in no smaller measure a consequence of the growing monopolization of large sectors of the economy (I forgot food services and mass retailing.) The CEO’s and upper management of these companies are the ones making out like bandits. Sharehoilders, not so much. The public, not at all.

Trust me, as soon as it becomes a fact of life, the caps will shrink dramatically and the fees will increase dramatically as well. One thing is as certain as the sun “coming up”: if there is profit to be made, there is enormous profit to be made.

Heh. Industrial org was the ONLY valuable econ course I took in grad school. Last I was in touch with the prof, about 25 years after I took the course, he told me it didn’t look a thing like what it was like when he taught it. It is the ONLY way to analyze an economy like the U.S. and now it is not even taught anymore.

AT&T is likely to get away with tiered pricing; it’s allowed for in the fake net neutrality rules put out by the FCC

Pffft! Even if it was specifically prohibited it would be allowed. The FCC would find no evidence of or intent to violate the law. Obama’s being the very best Republican he can be and so is the rest of his administration. They’ll always side with the money.

I have CREDO for mobile (I think they use Sprint). Time-Warner cable (included in my rent), no set-top box, only basic aka standard; the fuckers eliminated C-SPAN2 but offered us a set-top box to receive C-SPAN2 (and 1-2 other channels they migrated off basic) for one year free. I’d get it if the box included lips so they could kiss my ass. I’ve used AT&T like forever — they happen to be very reliable and highly customer-sensitive; switched from their DSL to U-Verse (18X speed vs. 3X max for $25/mo LESS, incl. local & LD phone, no TV service), and I knew this was coming. I stream internet radio constantly (via iTunes for convenience), but I don’t suppose it eats much BW.

That may be the only time I’ve understood Ann Coulter. She, of course, is talking about radiation directed at tumors (which isn’t ‘good’ for you, it’s bad for the tumor), but conveniently leaving out any of the specifics and how the cloud of nonspecific radiation digresses from radiation used in medicine.

WASHINGTON — A Wall Street Journal editorial writer who has been closely involved with the paper’s recent attacks on Elizabeth Warren is a former Goldman Sachs banker. The same editorial writer, Mary Kissel, is readying another piece critical of Warren and the new consumer agency, according to a source familiar with the coming article. Like most major newspapers, the Journal does not disclose the authors of its editorials. Kissel recently appeared on the John Batchelor radio show as a representative of the Journal’s editorial board to discuss Warren, and repeated the main arguments used in the editorials.

The editorials paint both Warren and the new Consumer Financial Protection Bureau as an immensely powerful, unaccountable organization. The nascent agency is assuming the consumer protection duties currently exercised by regulators at the Federal Reserve and the Office of the Comptroller of the Currency. The author, Mary Kissel, worked for Goldman between 1999 and 2002 as a fixed income research and capital markets specialist.

Kissel is listed on the Journal’s website as a member of the editorial staff and her bio includes her time at Goldman Sachs and notes that she worked for the company in both New York and London. On Wednesay, Warren testified before a House subcomittee, providing 34 pages of written answers while submitting to two-and-a-half hours of aggressive questioning from congressional Republicans, who deployed talking points similar to those used in the recent Journal editorials.

The US needs to move to a Socialistic model. We will never have enough progressive elected officials representing us. Our form of ‘Capitalism’ is nothing of the sort. This is a corporate Oligarchy and needs to be overthrown, period. There is virtually no ‘we the people’ in this.

That’s just what I was thinking. But I make it a general principle not to make appearance or wardrobe comments about women as they are never made about men. I try to stick to criticism of what women say/do, not how they look.

OTOH, I do go out of my way to make pejorative comments about how men look or their poor or uniform wardrobes. Just as a lesson to the other gender about what it’s like to be on the receiving end.

AT&T know the market and more, they know the psychological-economic tipping point. Many many households pay more for cable/Internet/mobile per month than anyone I ever knew paid for their monthly country club dues, and I knew plenty. It’s like my friend who moved to Toronto many years ago said about living there: It’s a great life if you can afford to love it.

I’m an AT&T dsl customer. When I heard this news the other day I thought I might get hit since I watch some shows and movies on Hulu. To get an idea of how bad it might be I downloaded a bandwidth monitor to measure my usage. I’m at 1.7gb for 3 days, so I’m not too concerned. There are probably a lot of people who will pass the limit though.

Scuttlebutt gossip that may not be entirely OT: the AT&T tech who set up my U-Verse said that Apple first offered the exclusive iPhone mobile rights to Verizon, who passed, so AT&T got the first-round rights. Well, now everything is all, it’s all like iPads2, plus Apple has expanded its online store to sell apps even to laptop/desktop users. All this stuff assumes a broadband connection or WiFi or wireless phone. The niche market is starting to resemble Moore’s Law, you know, the way people start to resemble their pets.

They have to do something, iphone traffic is crushing their network. A network engineer told me the other day that only X number of iphone downloading a youtube video at the same time will lock up the nearest AT&T cell site for all other traffic (I’ll leave X undefined to discourage impromptu college dorm experimentation, stick to drugs kids).

Its stated objective was to open up markets to competition by removing regulatory barriers to entry: The conference report refers to the bill “to provide for a pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private sector deployment of advanced information technologies and services to all Americans by opening all telecommunications markets to competition….” [2] Congress attempted to create a regulatory framework for the transition from primarily monopoly provision to competitive provision of telecommunications services.

A few corrections here. Comcast does not have usage-based billing, but possesses a 250GB bandwidth cap. In some ways, this is more sinister. If you go over it twice, they’ll shut your internet off without warning. IMO, this should be illegal considering the internet is all but a utility at this point, and few people have any more than 2 realistic choices for broadband access. Most larger cable companies, with the exception of Time Warner/BrightHouse have these caps now. I’ll talk more about it if anyone’s interested, but Cox has a cap, Charter has a cap, Mediacom has a cap.

If we let these companies have their way, they’d drive the internet right back to the 1990′s. They want to do everything they can to kill Netflix and cord-cutting, even though their customers can’t keep affording TV service.

Here’s one to try on: AT&T supplies routers, and forces them on to their customers. These routers provide the bandwidth of the entire home on TV, internet, and phone. Apparently AT&T has somehow found a way to not count u-Verse TV’s bandwidth against these caps, but count when its customers watch Netflix. This to me, even with the neutered corporate net neutrality, seems a violation to me. It’s wireless where the lobbyist struck their magic, not with wireline.

This is another example of corporations and their lobbyists taking over everything for their own benefit, and why oversight and regulation, especially in an essential industry to future growth and one that has such little competition, is so important. And it’s why we need people to stand up against these industry shills. Of course, instead we find a President who appoints them.

Also, this has developed for a while in Canada. Bell there kept making the caps smaller and smaller, raising the fees more and more, and trying to take third-tier providers using their lines, and have them charge the fees for Bell to make more. AT&T is starting that cycle here now.

From my own usage and Comcast’s meter, it looks like an hour’s worth of 720p HD (all Netflix offers at the moment) is less than 2 GB (it’s under 1 GB for an hour of SD). Poster takingbackamerica, above, is correct about Comcast’s current limit – 250 GB/month. The highest I’ve generated in 1 month, downloading lots of crap, playing games, and watching a few Netflix movies is less than 100 GB. I tend to watch a lot of sporting event streams that are unavailable on cable TV as well.

I suppose if I cut the TV cable cord completely I would use more, but it still might be a challenge to hit 250 GB in a month.

One other thing I’ll add about this issue is you can’t believe everything you read. I ran across an article on this the other day that claimed games like World of Warcraft used a lot of bandwidth. That is hilariously wrong. When WoW came out, most of the country was still on dialup, and the game actually worked if you had a decent dialup connection. You would have issues where a lot of other players were present, but so did the servers in the early days. Online gaming uses comparably little bandwidth, since graphics files and processing are present on your local computer. Games only need to send information like position and commands, and that is very minimal when it comes to bandwidth. Most upstream (consumer to cloud) connections are still horribly slow, compared to download speeds, anyway. If they required high bandwidth, they plain wouldn’t work.

While I’ve never worked for a Cable operator like Comcast or AT&T, I’ve worked in the broadband and information tech industries for almost 20 years.

Yea, I was going to say an average HD Netflix stream runs about 2.16 GB an hour. 3 hours per day would put you right at that 250GB cap. That really isn’t that much when you think about it, and as technology grows, streams will get much more detail-rich. A true HD stream that’s TV quality will run about 18 Mbps in bandwidth. Caps like these will make sure we never see 1080i streaming. And bandwidth usage grows with each year, so more and more people will be affected by these caps and overage fees with time.

Something to realize here: There is no bandwidth shortage. Bandwidth is not a utility the way water, electricity, and other metered (and regulated) industries are. The cost of bandwidth is incredibly cheap. Even for smaller providers, it’s as low as .02 a GB. For a behemoth like AT&T, lower that even more. A recent report showed that only 2-5% of the cost of a typical internet bill is for bandwidth. AT&T is creating an artificial scarcity to protect their TV revenue, get rid of competitors they find threatening, and all the while, pad their already obscene profits.

My advice: If you have an uncapped option in your area, cut the cord on AT&T. You won’t miss them. You’ll probably save money, and you’ll be doing the one thing you can still do in this country (for now) and that’s vote with your wallet. It may be corporatist vs. corporatist on the election ballot, but not with your almighty dollar.

Amen. There’s only one way to fight this, and it’s going to take consumers uniting the way they have in Canada.

If another large provider imposes a cap, a collusion lawsuit is begging to be waged. Not only then would they have to prove their network congestion, but they’d have to justify that their costs are somehow being hurt by high-bandwidth users. And again, it’s a violation of even the neutered net neutrality to discriminate between u-Verse TV traffic and other TV traffic, by my judgment.